Labour and you: what the election means for your finances
Tom’s take on the election
Update your operating system
Your computer’s operating system is out of date. To get the best experience of our website and enhanced security, please update your operating system.
Invest tax-efficiently to make the most of your money
Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest.
You want to make the most of whatever money you're putting aside, be it for yourself, your retirement or your children. An effective way to do this is to use your valuable tax allowances.
But what is a tax allowance? Most people get a personal allowance - an amount of income you don't have to pay tax on. Any income above this is taxed at your income tax rate. You also have tax-free allowances for things like savings interest, dividend income and capital gains. An Individual Savings Account (ISA) is a tax-exempt account - as long as you don’t contribute more than its annual allowance allows. Self-Invested Personal Pension (SIPP) contributions are eligible for tax relief within pension allowances.
Scroll down for information on tax allowances, including news on the latest government changes to allowances, and how different tax-efficient accounts compare.
Find out how tax-efficient accounts work in practise and how you can make the most of them.
We'll keep you updated with the latest tax allowances news.
Learn more about how each account works and how they could suit your future goals.
Explore what pension allowances and limits apply to you and how to maximise your pension savings.
Learn more about Capital Gains Tax and why you don't pay it on your ISA or SIPP investments.
Learn more about passing on wealth to your loved ones and ways to invest an inheritance.
Invest tax-free for a child's future with a Junior ISA and SIPP.
Your personal allowance is the amount of income you can earn before you pay tax.
It is currently £12,570 per year.
For anything you earn above this personal allowance, you'll pay income tax. The percentage you pay increases as you enter a new tax band as shown in the table below.
If your income is above £100,000, your personal allowance is reduced by £1 for every £2 you earn above £100,000. This is known as 'adjusted net income' and changes the starting point for the tax bands. If you earn £125,000 or more your personal allowance will drop to zero.
Personal Income Tax band | England, Wales and Northern Ireland | Scotland |
---|---|---|
Starter rate | N/A | 19% on earnings up to £2,306 |
Basic rate | 20% on earnings between £12,571 and £37,700 | 20% on earnings between £2,307 and £13,991 |
Intermediate rate | N/A | 21% on earnings between £13,992 and £31,092 |
Higher rate | 40% on earnings between £37,701 and £125,140 | 42% on earnings between £31,093 and £62,430 |
Advanced rate | N/A | 45% on earnings between £62,431 and £125,140 |
Additional/Top tax rate | Additional rate of 45% on earnings above £125,140 | Top rate of 48% on earnings above £125,140 |
Your personal savings allowance is how much you can make in interest from your savings each year tax-free, depending on what rate of income tax you pay.
Personal Income Tax band | Personal savings allowance |
---|---|
Basic rate | £1,000 |
Higher rate | £500 |
Additional rate | £nil |
Scottish Income Tax rates do not apply to savings income. These are taxed at the standard UK rates.
If you're married or in a civil partnership, the marriage allowance lets the lower earner of the couple transfer £1,260 of their personal allowance to their spouse. The lower earner must normally have an income below their personal allowance of £12,570.
The higher earning spouse, who must be a basic rate tax payer, will then receive a tax credit for the amount of personal allowance transferred to them, which is then deducted from the amount of tax they would usually have to pay.
If you're in Scotland you can claim marriage allowance if the higher earning spouse's Personal Income Tax rate is starter, basic or intermediate.
If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.
The annual dividend allowance is £500.
A dividend is an amount of money paid by a company to its shareholders. If your dividend payment is above your allowance, you'll pay a tax rate according to your Personal Income Tax band. You do not pay tax on dividends from shares in an ISA.
Personal Income Tax band | Tax rate on dividend income above allowance |
---|---|
Basic rate | 8.75% |
Higher rate | 33.75% |
Additional rate | 39.35% |
Scottish Income Tax rates do not apply to dividend income. These are taxed at the standard UK rates.
Tom’s take on the election
Tom Stevenson
Fidelity International
05 July 2024
Which gifts to family will avoid the IHT trap?
Ed Monk
Fidelity International
21 June 2024
What the tax proposals could mean for you
Richard Evans
Fidelity International
20 June 2024
If you have more than £100,000 to invest our financial advisers can help you make the most of your money.
Call us on 0800 222 550 for a free no-obligation discussion about your needs.
Important information - Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a Junior ISA will not be possible until the child reaches age 18. You can't normally access money in a pension until age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity's advisers or an authorised financial adviser of your choice. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity, Equity & Inclusion | Doing Business with Fidelity | Diversity, Equity & Inclusion Reports | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Staying secure | Statutory and Regulatory disclosures | Whistleblowing programme
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.